Expert: Fraudulent Jewelry Claims a Low-Cost, High-Payout Endeavor

Rising valuations and ease of transport and concealment have long made jewelry claims a target for fraudulent activity, but one expert says more criminals are coming to realize it can be a low-cost and high-payout crime.

Attorney Melissa Segel works with Swift Currie in Atlanta representing insurance carriers and businesses in commercial litigation and insurance coverage matters, with an emphasis on defending against bad faith and fraudulent claims.

Segel, who works with insurance adjusters, special investigative units and insureds in first- and third-party property and bodily injury loss claims, believes she’s seeing more cases of jewelry claims fraud because it doesn’t cost criminals much upfront.

Related: Jewelry Group Reports Highest Number of Crimes Ever Reported

“The policies are really easy to get, and they’re also very inexpensive, so the policy itself might just be 1 to 2% of the cost of the item,” she said. “So, it’s a very small investment, and I think people are realizing how easy it is to make a claim on jewelry policies.”

According to the U.S. Department of Defense, more than $1 billion in jewelry is lost annually, representing 70% of all stolen personal property.

The Coalition Against Insurance Fraud found that scams like padding a claim or people falsely claiming they lost expensive piece of jewelry and filing a claim costs up to $80 billion annually.

Related: Suit: Brink’s Driver Asleep During California Jewelry Heist

According to Segel, common practices fraudsters use involve the theft of old pieces of jewelry, claiming jewelry was lost or stolen, staged thefts and exaggeration of loss value. She is also seeing instances in which supposed pieces were obtained through inheritance without the necessary evidence of ownership.

Identifying and then proving fraud can be difficult, she said.

“The challenges we have is that there’s some inconsistencies with the way things are prosecuted… there’s a lot that goes into proving that the incident did not take place as alleged, or that the item of jewelry was not really owned by the insured,” Segel said.

She advises insurers to be aware of fabricated receipts that may miss on important details and information, and to look for proof of someone wearing jewelry in the past—not just recently.

“People are figuring out that [they can] borrow a piece of jewelry, get an appraisal, walk into an agent’s office, purchase the policy for just 1% of the value of the item, return that jewelry item to their friend, and then two, three months later, claim it was lost and think that they’re going to recover the full amount,” Segel said.

Colonno Selestino is an intern for Claims Journal. He’s a senior at Cal State University Long Beach and expects to graduate with a B.A. in journalism in 2025. He also works at the Long Beach Current, CSULB’s student newspaper.